Nowhere in your story does the Treasury use the term "default" which has a very specific meaning in this context. To say that the government may not be able to “meet all of the nation’s obligations” is not the same a defaulting. Those who work for the WSJ would know this. The titling of this article is irresponsible at best. I read this publication for information, not obfuscation.

3:50 pm July 27, 2011

Gary wrote :

I agree with Joe Sneed. Completely.

10:19 pm July 27, 2011

ROBERT DEL ROSSO wrote :

Milton Friedman (an idol of many conservatives) correctly pointed out that when the Fed CUT the money supply in 1929-1930, it succeeded in transforming the 1929 “Recession” into the Great Depression.
This just in—the Fed’s Beige Book reported July 27th that the U.S. economy slowed in 8 of 12 regions. This is exactly the WRONG time to CUT government spending. But Republicans believe you “stimulate” the economy by CUTTING spending.

I see no difference between the contractionary 1930 monetary policy that Freidman correctly criticized, and the contractionary fiscal policy now championed by most Republicans.

I am afraid that future historians will write that when Republicans forced President Obama to cut spending too much in 2011, the 2008 Great Recession was transformed into the 2011 Great Depression.

Rush Limbaugh, on July 7th told us there would be “no default” if the debt ceiling were not raised. Rush said the President needs to “prioritize” so that the debt service gets paid. Rush said the Congress should tell the President: “it’s your job to live within the debt ceiling we give you”. Funny, the Congress never told that to any previous President! (Well, it would be funny if it were not so tragic.)

The tax revenue will be about $200 billion in August, with about $330 billion in scheduled spending, leaving $130 billion unpaid.

But Rush did not say what other spending should be cut -Social Security, the Military, farm subsidies ($172 billion per year---that‘s $1.7 TRILLION over 10 years right there! Oh, I forgot Michelle Bachmann‘s parents get farm subsidies!) or something else?

The problem is, some people seem to think that if we do not raise the debt ceiling, then maybe the debt will be easier to deal with. But when the $1,650 billion FY 2011 budget deficit represents 43 per cent of the budget and discretionary spending traditionally only about 19 per cent, it is clear that both sides have to compromise, not just the Democrats. Some people think if we just eliminate foreign aid ($55 billion per year, and not $935 billion per year, as many Americans think), that would solve everything.

Of course, Rush ignores the fact that no debt ceiling was ever meant to be a permanent “straight jacket” on the budget, as witnessed by George W. Bush raising the same debt ceiling seven times.

**************************************************

Many conservatives say we should be “strict constructionists” in interpreting the Constitution. (Let’s forget, for a moment, that in 1803, Thomas Jefferson had to abandon his own Strict Constructionism to buy Louisiana, since the Constitution does not give the government the power to buy foreign land. That’s just one of those unfortunate “historical facts” that get in the way of ideology.)

The Fourteenth Amendment (Section 4) states that: “the public debt of the United States shall not be questioned.” I believe the Supreme Court has never ruled whether a failure to increase the Debt Ceiling overrules the 14th Amendment or vice versa. President Obama needs to rely on the 14th Amendment to operate the government, should Congress fail to increase the Debt Ceiling. The President should welcome a court challenge to the 14th Amendment.

Article VI of the Constitution states: “This Constitution…shall be the supreme law of the land; and the judges in every state shall be bound thereby, ANYTHING in the Constitution or laws of any state to the contrary notwithstanding.” (my caps)

I am no constitutional scholar, but, given a choice between Article VI and the 14th Amendment, on the one hand, and the Debt Ceiling on the other, I feel that the Supreme Court would rule that the Debt Ceiling bill is unconstitutional.

Article VI goes on to say: “The Senators and Representatives…shall be bound by oath to support this Constitution.”

Today, on Bloomberg Radio, Gary Stern, former President of the Minneapolis Fed, said “we have never been here before” (facing a potential default) and “so it’s difficult to say what would happen.”

In 2004, a Bush II aide said: “We are an empire now”. In school, we were told that “the Roman Empire fell from within”. Sometimes I had difficulty understanding that. But certainly ideological rigidity was mainly responsible for the fall of the Soviet Empire, whose 20th Anniversary we celebrate this year. After seeing how the Republicans hold to their “no tax increase, no closing tax loopholes, don't worry about the debt ceiling or default” ideology, I can now see how the American Empire can “fall from within”.

God Bless America. God help us all.

2:36 am July 29, 2011

Elizabeth Hensarling wrote :

What's the governt idea for how we're suppose to pay our billsso thank you for putting my generation at a lose because what are we suppose to do. I hope you guys fix this soon.

9:39 am July 29, 2011

Iago wrote :

Robert Del Rosso,

Please read the rest of the 14th, you'll find that the Constitution grants the President no such unilateral power over our debt. To wit:

"The validity of the public debt of the United States, AUTHORIZED BY LAW, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned."

Can the President, per the Constitution, make law? No, he cannot. The power to legislate is left to Congress, not the Executive branch.

"Section 5. The Congress shall have power to enforce, by appropriate legislation, the provisions of this article."

And here the 14th Amendment certifies that the power over the debt is soley within the power of Congress, especially when we combine this section with Article 1 Section 8:

"To borrow Money on the credit of the United States;"

It is unusual to me that a part of the political spectrum that hated Bush for taking upon the Executive branch so many unilateral powers now urges Obama to do the same. It is situations like this that separate partisans from patriots. It clearly demonstrates the divide between those who actually uphold the Constitution, no matter what power holds power, and those who would seek to bypass or destroy the Constitution to further their own political aims.

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